How Tax Code Affects Health Insurance

Ruzanna Harutyunyan's picture
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"Tax Subsidies for Health Insurance," Kaiser Family Foundation: The issue brief looks a the current tax treatment of health insurance, using examples of workers with different wage earnings to illustrate how the current tax code affects families depending on whether they have health coverage and whether that coverage is provided by an employer.

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The current subsidy for employer-based coverage -- which excludes the value of employer-sponsored health benefits from taxable income for workers -- costs the U.S. Treasury more than $200 billion in lost revenue per year.

The brief illustrates that the current tax system generally provides a larger subsidy to higher-income families, since higher-income workers pay federal and state income taxes at a higher marginal tax rate than lower-income workers (Kaiser Family Foundation release, 7/10).

Reprinted with permission from kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, and sign up for email delivery at kaisernetwork.org/email . The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation. © 2007 Advisory Board Company and Kaiser Family Foundation. All rights reserved.

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